Down but not yet out

All the construction projects connected with the Euro 2012 European football championship will soon be completed. The scale of projects with support from European funds (e.g. roads) will soon gradually get smaller. Roman Nowicki, chairman of the Construction Congress, emphasises that some construction companies might have problems with securing new contracts as a result. Having few prospects for further projects they might start reducing their workforces or salaries. As a result there will be a lot of construction professionals looking for new jobs on the market. "The best specialists should have no problems finding new jobs. They will certainly be employed by companies that have secured long-term contracts and are doing well. Nonetheless, there will a much higher level of competition among construction professionals on the Polish job market compared to now. This will bring about a stabilisation of salaries. The lowering of wages also cannot be ruled out in many cases," predicts Roman Nowicki. He also points out that some construction professionals might go abroad to find new jobs. The need for such employees has recently grown across the Oder river, where the growth of the German economy is resulting in more projects being commissioned, therefore more manpower is needed: both in construction and in related trades.

Employment rationalisation
Jan Mikołuszko, president of the management board of Unibep, shares the opinion that the completion of construction projects connected with Euro 2012 and a gradual reduction of projects developed with the support of EU funds will bring about considerable changes on the job market for construction professionals. "There will definitely be a rationalisation of employment in many construction companies. As a result, the weakest and least efficient employees might be made redundant. It is not out of the question that some top professionals might leave such companies as they become dissatisfied with the more limited income opportunities. However, the best ones will quickly be taken on by construction companies that are in a healthy state. This year the sale of our company's services will grow by a dozen or so percent, so there will be no shortage of work," claims Jan Mikołuszko. "Last year the revenue of the company I manage exceeded PLN 800 mln and in 2012 it is to grow to app. PLN 1 bln. By comparison, in 2010 it amounted to PLN 658 mln. Also our export sales have been growing. Unibep has recently launched construction work on sites in Norway, Russia and Belarus. Our potential new markets include Kazakhstan, Ukraine and perhaps Saudi Arabia, Qatar and Libya. Around 750 employees are currently working for Unibep and the employment level will not be reduced," assures Mr Mikołuszko.

Little cash for firms or staff
According to Jan Mikołuszko, some new developments could take place on the job market in H2 2012. The larger number of people looking for work in the construction industry will certainly stabilise salaries in the sector. "We definitely should not expect salary increases. Companies might only compensate for the increasing costs of living," concludes Jan Mikołuszko. He also points out that margins are currently very low in the construction sector. They range from 1.5 pct to 2 pct on average. "Consequently companies are not generating the profits that would make it possible for them to increase salaries," states Mr Mikołuszko. He points out at the same time that there are many international construction companies operating in Poland. When their contracts in our country are completed and new ones are signed abroad, they will send over the best of their Polish employees that are willing to work over there. This should contribute to the tempering of the situation on our job market. Some employees will definitely try to find jobs on building sites abroad on their own accord. "It will certainly be a more difficult time for professionals representing our trade," declares Jan Mikołuszko. He says at the same time that Unibep is prepared to employ highly qualified specialists.

More insecurity
Meanwhile Ryszard Kowalski, chairman of the Construction Materials Producers Employers' Association, does not feel that there will be a shortage of work for many construction professionals soon. "Of course, in times of increased insecurity, but not as many say in times of crisis, the probability that negative factors will occur grows. It is important that there is a respect for the obvious economic facts in the construction industry, apart from the technical knowledge and openness to innovation," stresses Ryszard Kowalski. He emphasises that market economies develop (or shrink) in a sine-wave manner, which is why it is no surprise that the demand for construction services drops periodically. The cycle of demand in the construction sector is more problematic because the results of construction projects are delayed. "However, we should not demonise the decline in demand. Our economy is not just about Euro 2012; besides we are considerably behind schedule in this case, so there is still a lot of work to do. EU funds will continue to support our transport- and ecology-related projects, for example. There will probably be fewer of them, but more than only a few. Secondly, it is worth taking a look at companies' own funds - they are quite substantial. So if prospects for the development of the economy become promising, particularly in regards to the Eurpean Economy, it will increase the demand for projects, including construction projects," believes Ryszard Kowalski. And he goes on to add that it is high time we stopped enthusing about our ability to absorb EU funds and started paying attention to the efficiency with which we are spending them. He believes that there could be more and better things constructed for the same amounts of money, but not when the only real gauge in public tenders is the price. "This apparent absurdity - more expensive but cheaper - can be explained in a straightforward way. These pseudo low prices in fact represent considerable delays, as well as throwing contractors off building sites, demolitions and repairs, followed by higher maintenance costs as renovations are needed sooner. There are reserves in the construction industry, but using them must be profitable for the participants," concludes Ryszard Kowalski. He points out that high construction costs nowadays are partly the result of badly drafted law. Unpredictable space (i.e. the lack of spatial planning), arguments about competence, the abuse of monopolistic positions by companies and finally blurred responsibility - these are the factors directly or indirectly causing the increase in costs. "Last but not least, an increase in efficiency by lowering the costs in the construction industry would be of considerable significance for the development of the residential construction sector. Because apartments that are built cheaper - not worse, and perhaps even better - would become accessible for a larger number of citizens. Then the potential urban demand, since we have over 100 fewer apartments per 1,000 inhabitants than the majority of EU countries, would largely change into the real demand, and consequently into jobs in the construction industry," believes Ryszard Kowalski, the chairman of the Construction Materials Producers Empployers' Association.

The best ones will find work
The scale of projects connected with the organisation of Euro 2012 has undoubtedly been unprecedented. The scale was similar in the case of the projects supported by EU funds that have been developed so far. Upon the completion of these contracts it might turn out that there is less work for many construction companies. In such a situation, companies usually cut costs by reducing employment and salaries, among other things. However, it should be remembered that a lot of companies have signed long-term contracts. Their order portfolios are full and so far they have not had to worry about the worsening economic climate in the industry. Despite this, employees in many companies will still not be able to feel secure in their jobs, at least because they could be offered to professionals with more comprehensive qualifications who are currently dissatisfied with their salaries.